Correlation Between MEGA METAL and Eminis Ambalaj

Can any of the company-specific risk be diversified away by investing in both MEGA METAL and Eminis Ambalaj at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining MEGA METAL and Eminis Ambalaj into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MEGA METAL and Eminis Ambalaj Sanayi, you can compare the effects of market volatilities on MEGA METAL and Eminis Ambalaj and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in MEGA METAL with a short position of Eminis Ambalaj. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEGA METAL and Eminis Ambalaj.

Diversification Opportunities for MEGA METAL and Eminis Ambalaj

0.12

Correlation Coefficient

MEGA METAL  Eminis Ambalaj

Average diversification

The 3 months correlation between MEGA and Eminis is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding MEGA METAL and Eminis Ambalaj Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eminis Ambalaj Sanayi and MEGA METAL is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on MEGA METAL are associated (or correlated) with Eminis Ambalaj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eminis Ambalaj Sanayi has no effect on the direction of MEGA METAL i.e., MEGA METAL and Eminis Ambalaj go up and down completely randomly.

Pair Corralation between MEGA METAL and Eminis Ambalaj

Assuming the 90 days trading horizon MEGA METAL is expected to generate 0.53 times more return on investment than Eminis Ambalaj. However, MEGA METAL is 1.87 times less risky than Eminis Ambalaj. It trades about 0.06 of its potential returns per unit of risk. Eminis Ambalaj Sanayi is currently generating about 0.02 per unit of risk. If you would invest  3,056  in MEGA METAL on September 22, 2024 and sell it today you would earn a total of  84.00  from holding MEGA METAL or generate 2.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

MEGA METAL  vs.  Eminis Ambalaj Sanayi

MEGA METAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MEGA METAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Eminis Ambalaj Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eminis Ambalaj Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with MEGA METAL and Eminis Ambalaj

The main advantage of trading using opposite MEGA METAL and Eminis Ambalaj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEGA METAL position performs unexpectedly, Eminis Ambalaj can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Eminis Ambalaj will offset losses from the drop in Eminis Ambalaj's long position.

The idea behind MEGA METAL and Eminis Ambalaj Sanayi pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.